Should there be an oil export ban?

**Kai Rizdahl** (0:02)
Well, today, the Federal Reserve, and how nice would it be to not have to work?
From American Public Media, this is Marketplace.
In Los Angeles, I'm Kai Rizdahl, Thursday to day 6, August. Good as it always is to have you along, everybody. At the risk of adding to your war-induced economic news whiplash, it seems reports that the Strait of Hormuz is going to open any day now, and that a lasting ceasefire is at hand. We're a bit premature. Not a new development, I know, but market reactions were predictable. Stocks down, oil up, which gets me to this. Oil is the global commodity. Traded globally, bought, sold globally. So it is of note that Politico is reporting that the American oil industry has approached the White House trying to prevent a rumored oil export ban. Marketplace's Elizabeth Troval gets us going.

**Elizabeth Troval** (1:12)
The US has already lived its oil export ban era. It started during the last global energy shock. Dan Pickering is with Pickering Energy Partners.

**Dan Pickering** (1:21)
Coming out of the Arab oil embargo, I think the view was all the US resources need to stay in the US.

**Elizabeth Troval** (1:29)
It was a very different time for US oil. Production was down and imports were up, says Rice University's Ken Medlock.

**Ken Medlock** (1:36)
The fact that an export ban was put in place, it really didn't have much of an impact at all.

**Elizabeth Troval** (1:42)
Fast forward to the 2010s, fracking unleashed enormous and rapid production growth in the US. The export ban was lifted in 2015

**Ken Medlock** (1:52)
It actually opened a much larger market up to domestic producers of oil, who you're going to sell to, who you're going to buy from, all of that increases, and that improves the commercial case for continued expansion of the industry.

**Elizabeth Troval** (2:05)
That helped America get to the oil dominance it enjoys today. As we face another global oil crisis and higher gas prices.
Jason Bordoff is with Columbia University.

**Jason Bordoff** (2:18)
There's political pressure for politicians to do whatever they can to help consumers or even look like they're trying to help consumers, whether the tools are effective or not.

**Elizabeth Troval** (2:27)
He says a new export ban, especially one that also bans fuel exports, would cause more harm than good.

**Jason Bordoff** (2:35)
You would worsen the economics of domestic refineries. You'd worsen the economics of domestic oil production.

**Elizabeth Troval** (2:41)
At first, consumers would benefit, says Ryan Kellogg with the University of Chicago.

**Ryan Kellogg** (2:46)
Okay, prices are great.

**Dan Pickering** (2:48)
Consumers celebrate and start driving around. But that's just not going to last very long.

**Elizabeth Troval** (2:53)
There would eventually be even less oil and fuel, so prices would come right back up. I'm Elizabeth Troval for Marketplace.

**Kai Rizdahl** (3:03)
Wall Street today, like I said, stocks down, oil up, details numbers when we get there.
The difference between two pictures showing basically the same scene. We are gonna do a version of that, but much more fun, with the statements the Federal Reserve sends out after its meetings announcing what it's done on interest rates. Our fodder for this exercise, in compare and contrast, are the two meetings that Kevin Warsh has now chaired, as we all try to get a handle on the changes that are happening at the Central Bank. Martha Olney is a Professor of Economics, emeritus at the University of California, Berkeley, also a close reader of those fed statements. Welcome to the program.

**Martha Olney** (4:11)
Thank you so much. I'm happy to be here.

**Kai Rizdahl** (4:13)
The first thing I want you to do is we will go through the last statement of Chair Powell's tenure, which I have here in front of me. It's a page and a half-ish. Basically, what's the gist of the typical Powell statement?

**Martha Olney** (4:28)
The typical Powell statement, this April 29th statement, you can compare it with the statements from about the 15 previous meetings, and you will find very little difference.
So it starts out, recent indicators, as opposed to available indicators, suggest that economic activity has been expanding at a solid pace as opposed to a moderate pace. And so it was very much, there were always one, two, three, four, five paragraphs. What was going to be in each paragraph was always the same. Each paragraph had three sentences. And so it was very much like those books that we used to have when we were kids, that were, that choose your own adventure books.

**Kai Rizdahl** (5:06)
Right. And we, those who follow the Fed, would spend a lot of time comparing those words, right?